The Last Sacrifice

From loudspeakers in Soviet homes, parks, and on street corners the deep, resonant voice of Radio Moscow's ace announcer, Yuri Levitan, boomed bad & good news. Soviet citizens grew taut with strain as they listened to Levitan read a state decree. When he finished they erupted with grief or joy depending on the number of rubles each had hoarded under his mattress. The decree abolished: 1) 90% of all unbanked individual savings; 2) rationing of food and clothing.

Signed by the Politburo's Andrei Zhdanov, the decree was Soviet Socialism's drastic move to control inflation by issuing new money and setting up a system of pegged commodity prices to replace rationing.

Speculators & Other People. With production still low and demand growing, the Soviets had spiraled into economic trouble similar in some ways to capitalist inflationary difficulties. The ruble, officially valued at 20 U.S. cents, was worth no more than three in actual buying power. Illegal speculation by bureaucrats, collective-farm bosses, store and factory managers and others had become a lively menace to state planning. Peasants, and some city dwellers, had also accumulated hoards of rubles largely because too few of the things they needed, or wanted to buy, were available. Never knowing when deposits might be frozen, they distrusted banks, kept their hoarded money at home. Rationing controls could not be lifted until this money was destroyed, and its destruction was Zhdanov's principal aim.

This week Soviet citizens with unbanked rubles were required to exchange them for new money at the rate of ten old rubles for one new. By contrast, those who had banked their money got one for one on the first 3,000, two for three on the next 7,000, one for two on all above. The holders of government bonds were harder hit. They will get new bonds at one new ruble for three old.

For the ordinary Russian, however, the new price system has a bright counterpart. Wages were to remain the same in new rubles as in the old. But bread would be cheaper by 12%, cereals by ten, and most other foods remain unchanged from their previous lowest levels. Because citizens whose prices would be cut greatly outnumbered those with unbanked hoards, there was more jubilation than grief in Russia at the Zhdanov decree.

The Spree & the Promise. The reform had been anticipated. Two weeks earlier the U.S. State Department's Voice of America had reported a buying spree in Moscow, started by a rumor of new money. Thousands of Russians frantically tried to convert their money into more durable things--silk lampshades and fur coats--and stores closed on empty shelves behind signs which read: "Closed for repairs." Even when people had new money the shelves might stay empty.

But more striking than the rumor's accuracy was the half apologetic, half-propagandist, wholly contradictory tone of Zhdanov's decree. Said he: "Currency reform in our country is radically different from currency reforms in capitalist countries. In the U.S.S.R. it is being carried out not at the expense of the people. . . . However, the reform demands certain sacrifices. The state is taking on itself the greater part of the sacrifice, but it is also necessary for the population to bear a part --all the more since it will be the last sacrifice."

Soviet citizens fervently hoped that the years ahead would prove him right, especially about the next to the last word.

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